CMS Proposes Extending Parity to Medicaid Managed Care

June 3, 2015

On April 6, just after the national meeting of the American Association for the Treatment of Opioid Dependence (AATOD), the federal government issued a proposed rule that would bring Medicaid managed care in line with parity regulations that govern commercial insurance. The long-awaited proposed rule, issued by the Centers for Medicare & Medicaid Services (CMS), would protect low-income people being treated in opioid treatment programs (OTPs) and other programs for patients with substance use disorders or mental illness.

Patients in fee-for-service Medicaid would still not be covered by parity; however, most states are moving away from fee for service, towards managed care for Medicaid. More than two years ago, the Department of Health and Human Services suggested that Medicaid managed care might not have to comply with parity, throwing treatment providers into confusion. However, the department later said that there would be additional guidance, which has now come out in the form of a proposed rule.

“We were really pleased with this,” said Gabrielle de la Gueronniere, national policy director for the Legal Action Center. “It would expand parity protections to all people who are enrolled in managed Medicaid, regardless of how they got the benefits.”

The Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted in 2008. It’s likely going to be 2017 before the final rule implementing parity for Medicaid managed care will be published, with even more time required for compliance. Insurance companies requested the extra time.

Under the proposed rule, non-quantitative treatment limitations (NQTLs) on mental health or substance use disorder (MH/SUD) benefits couldn’t be more restrictive than those applied to medical/surgical benefits. These NQTLs include fail-first policies, under which insurance companies require a patient to fail at a lower, less expensive level of care before they are allowed to go to a higher level of care, unless these same policies exist in the patient’s medical-surgical plan. The proposed rule also bans limitations on provider specialty and facility type.

“The proposed rule is a big step in the right direction,” said Ms. de la Guerroniere. “The major area that we are concerned about is the amount of time” until implementation. “So we are discussing some ways to potentially require action along the way. But overall, we see a lot of opportunity and are really hopeful.”